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The S&P Cotality Case-Shiller Composite reported an unadjusted decline in October but seasonally adjusted the 10-city, 20-city, and national composite all rose.

The pre-seasonally adjusted U.S. National, 10-City Composite, and 20-City Composite Indices continued to report negative month-over-month changes in October, posting a -0.3% drop for the 20-City Composite Index and -0.2% decreases for both the 10-City Composite and U.S. National Indices.

After seasonal adjustment, the U.S. National Index reported a monthly increase of 0.4% and both the 10-City Composite and 20-City Composite Indices posted month-over-month gains of 0.3%.

Month-Over-Month

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The indexes had five months of declines but in the past three months the declines have been wiped out for the 10-city index. The national index is just off a record high.

Case-Shiller National, Top 10 Metro, Percent Change From Year Ago

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• The S&P Cotality Case-Shiller U.S. National Home Price NSA Index posted a 1.4% annual gain for October, up from a 1.3% rise in the previous month.
• Regional divergence persists as Midwestern and Northeastern markets, led by Chicago (5.8%) and New York (5.0%), outpaced Sun Belt cities like Tampa (–4.2%) and Phoenix (–1.5%).
• Sixteen of 20 markets declined month-over-month in October, signaling broad stagnation as high mortgage rates weigh on affordability and suppress price momentum.

Regional Differences

“October’s data show the housing market settling into a much slower gear, with the National Composite Index up only about 1.4% year over year – among the weakest performances since mid-2023,” said Nicholas Godec, CFA, CAIA, CIPM, Head of Fixed Income Tradables & Commodities at S&P Dow Jones Indices. “This figure is essentially unchanged from September’s 1.3% annual gain and represents less than a third of the 5.1% average home price increase recorded in 2024. 

“Regional performance underscores a striking geographic rotation. Chicago now leads all major markets with a 5.8% annual price gain, followed by New York at 5.0% and Cleveland at 4.1%. These traditionally stable Midwestern and Northeastern metros have sustained solid growth even as broader conditions soften. By contrast, Tampa home prices are down 4.2% year over year – the steepest drop among the 20 cities, marking Tampa’s 12th consecutive month of annual declines. Other former high-flyers in the Sun Belt are similarly struggling: Phoenix (-1.5%), Dallas (-1.5%), and Miami (-1.1%) all remain in negative territory. It’s a stark reversal from the pandemic boom, as the markets that were once ‘pandemic darlings’ are now seeing the sharpest corrections while more traditional metros continue to post modest gains.

“Short-term momentum has essentially stalled. Sixteen of the 20 cities saw home prices decline in October (NSA) from the prior month, with Cleveland, Boston, Seattle, and Denver each falling roughly 0.8% to 1.0%. Only Phoenix, Miami, and San Francisco managed slight monthly upticks. Even after adjusting for normal seasonal lulls, the National Index was flat to only slightly positive in October (following a modest +0.2% after seasonal adjustment in September). This broad stagnation suggests that elevated mortgage rates – still hovering around the mid-6% range in late October – are finally overwhelming the market’s earlier supply-driven resilience.

“For context, this is the weakest annual home price growth since the March through July 2023 period, when the market was absorbing the initial shock of the Fed’s rapid rate hikes,” Godec concluded. “But today’s headwinds appear more entrenched. Elevated mortgage rates, paired with inflation that continues to outpace home price gains, have intensified affordability pressures, potentially setting a new equilibrium of minimal price appreciation or, in some markets, outright declines.”

Case-Shiller National and Top 10 Metro Details

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Bubbles and a Locked Market

Price gains have stalled on average but some cities still show growth while overbuilt markets have declines.

Prices are not affordable anywhere. This is the legacy of inept Fed policy twice.

First, the Fed created a massive bubble of liar loans ahead of the Great Recession. Then the Fed slashed rates to zero in Covid pandemic creating the current locked market.

Transactions have stalled. Few are willing to trade a 3 percent mortgage for a 6 percent mortgage. But unlike the Great Recession with huge job losses, home owners can just sit tight.

Note that Case-Shiller is a lagging indicator. Today’s release was October. It represents sales that closed in August, September, and October.

But still, home prices at that time were at or close to the peak, at least nationally.

Existing Home Sales

Existing-Home sales have been flat since October of 2022 at roughly 4,000,000 annualized sales for three full years. Only price insensitive buyers have been buying.

For discussion, please see Existing-Home Sales Flounder at the Same Level for Three Years

Home are still not affordable. Neither rising inventory nor falling mortgage rates have helped.

Also see my December 19 post, How Much More Will Mortgage Rates Have to Drop to Spur Home Sales?

It’s not that simple because one needs to factor in home prices. But we can look in isolation.

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